Answer :
The Sharpe measure for the S&P 500 over the last ten years is 1.75, calculated using a return of 14% and a standard deviation of 8%, the correct answer is option (C)
To calculate the Sharpe measure, we need the risk-free rate of return. Since it is not provided in the question, we'll assume it to be zero for simplicity. The formula for the Sharpe measure is:
Sharpe Ratio = (Return - Risk-Free Rate) / Standard Deviation
In this case, the return of the S&P 500 over the last ten years is 14%, and the standard deviation is 8%. Assuming the risk-free rate is 0%, we can calculate the Sharpe measure as follows:
Sharpe Ratio = (14% - 0%) / 8%
= 14% / 8%
= 1.75
Therefore, the Sharpe measure for the S&P 500 over the last ten years is 1.75.
Hence, the correct answer is option (C) 1.75.
To learn more about return follow the link:
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The complete question is:
What is the Sharpe measure for the S&P 500 over the last ten years if the standard deviation was 8% and the return was 14%?
A) 1.55
B) 1.69
C) 1.75
D) 1.99
E) 2.09
